Financial reforms and corporate finance in emerging markets: An analysis of dividend policy among public listed firms in Pakistan

Authors

Mohammed Nishat, Institute of Business Administration, Karachi, Pakistan
Wali Ullah, Graduate School of Economics and Management, Tohoku University, Sendai, Japan

Abstract

This paper analyzes the dividend behavior of 535 Pakistani listed companies during 1988 to 2005 using the Probit regression model. The findings validate the theoretical prediction for positive and significant impact of last year dividend on the current year dividend decision. More profitable and liquid firms have a higher probability to declare the dividends. Furthermore, firm size, ownership, equity and tax are positively related to the dividend declaration decision. The firms' dividend behavior differs significantly across Industries. The secondary market development has a significant effect on dividend decision and financial liberalization has been associated with shift of firms from debt market to equity market.

Keywords

Corporate finance, Emerging markets, Dividends, Public companies, Public welfare, Foreign investments

DOI

https://doi.org/10.54784/1990-6587.1301

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Nishat, M., & Ullah, W. (2012). Financial reforms and corporate finance in emerging markets: An analysis of dividend policy among public listed firms in Pakistan. Business Review, 7(1), 54-63. Retrieved from https://doi.org/10.54784/1990-6587.1301